The Future of OTT Monetization: Is TVOD the Missing Piece?

Introduction

Remember the days when watching TV meant paying for a bunch of channels you never really watched? Or when buying music meant getting an entire album just for that one hit song? Over time, things changed. Consumers demanded choice — picking individual channels, streaming single songs, and even paying per news article.

Now, take a look at the OTT industry in India. While it has transformed entertainment, have we really evolved when it comes to payment models? With over 550 million OTT users, only 100 million are actually paying for content. The rest? They stick to ad-supported models. Meanwhile, subscription growth is slowing, and users are becoming more selective. So, could Transactional Video-On-Demand (TVOD) be the next big thing in India’s OTT space? Could giving users the power to pay only for what they watch be the missing link in the streaming revenue puzzle?

Historical Trends: Why Choice Always Wins

Let’s rewind a bit. History shows that when consumers are given more control over their spending, they take it.

Television: We started with bundled cable and DTH packages, then moved to à la carte channel selection.

Print Media: Subscriptions ruled for years, but digital paywalls now let readers buy single articles instead of entire newspapers.

Paywall with both subscribe and pay-per-article option; Source: Rascal

Music Streaming: First, albums were the only way to get your favorite song. Then came iTunes with single-track purchases, and later, streaming platforms blended subscriptions with free access.

OTT is following a similar path. Right now, Subscription Video-On-Demand (SVOD) dominates, but if history has taught us anything, it’s that flexibility in payments is not just a trend — it’s an eventual necessity.

The Current OTT Landscape in India

*As of Q3 2024, Source: GrowthX

India’s OTT market is booming, but there’s a clear divide in user behavior.

550M OTT users → Only 100M are paid subscribers

SVOD subscriptions down 2%, while AVOD users grew by 21%

Subscription fatigue is real — the average number of OTT subscriptions per paying user fell from 2.8 to 2.5 in just a year

So, what’s happening here? Are people unwilling to pay for content? Not really. The problem is that they don’t want to pay for an entire platform when they just want to watch one or two specific things. Ever felt that frustration when a movie you want to watch is available on a platform you’re not subscribed to? You’re not alone.

Why TVOD Makes Sense for India

TVOD solves this problem by letting users pay only for what they want to watch. Sounds simple, right? But it could be a game-changer.

Think about it — would you rather pay ₹500 for a monthly subscription you might not use fully, or ₹50-₹100 for just the blockbuster movie or exclusive sports event you actually care about?

Here’s why TVOD could work in India:

Price Sensitivity & Control — Indians love a good deal. Paying per movie or episode feels more justified than a recurring subscription fee.

Rise of Digital Payments — Thanks to UPI and mobile wallets, making small transactions is now second nature.

Regional Content Boom — With 54% of OTT content in regional languages, users might want to pay only for select content that speaks to them.

Shift in Viewing Habits — While smartphones dominate (97%), more users (70M and growing) now prefer streaming on smart TVs, making one-time movie rentals a more immersive experience.

The Challenges & Workarounds

Of course, introducing TVOD isn’t a magic fix. There are hurdles to overcome:

Will users actually pay? While we’ve seen success in gaming and music, OTT platforms will need to convince users that TVOD provides better value than a full subscription.

Balancing TVOD, SVOD & AVOD — The challenge is to create a win-win model where TVOD adds revenue without eating into existing SVOD/AVOD users.

Piracy Risks — If people can pay per movie, there’s always a chance of screen recording and illegal redistribution.

But it’s not all theory — FanCode has already cracked this model in sports streaming. Instead of forcing fans to buy an expensive annual sports pass, they let users pay for just the matches or tournaments they actually want to watch. The response? Massive adoption.

Snapshot of FanCode’s Highlights; Source: Dream Sports

Conclusion: The OTT Industry Needs to Adapt

The writing is on the wall — SVOD alone isn’t enough. AVOD is growing, but relying solely on ads isn’t a long-term strategy. Users want choice, and TVOD could be the missing link that helps OTT platforms unlock new revenue without forcing long-term commitments.

If television, music, and news industries have evolved towards flexible payment models, why should OTT be any different?

The real question isn’t if TVOD will take off in India — it’s who will lead the way. Which OTT player will embrace this shift first and redefine the streaming game? If history is anything to go by, the answer is simple: the one that listens to its users.

What do you think? Would you prefer to pay only for what you watch, or do you still see value in full subscriptions? Do comment your thoughts in the response section.